European CCS in an international environment

The outlook on the creative economy worldwide shows an expanding and resilient sector. According to the United Nations Conference on Trade and Development (UNCTAD) latest report, the global market for creative goods has more than doubled in size from USD 208 billion in 2002 to USD 509 billion in 2015 with an average growth rate of more than 7%. The report notes however a worsening situation in market conditions between 2014 and 2015 consistent with a general slowdown in global merchandise trade. Regarding creative services, developed countries have performed an annual growth rate of 4.3% between 2011 and 2015 which represents more than double that of all services driven by the digital (especially e-commerce) and sharing economies.¹⁶⁴

In 2014, the EU’s cultural goods trade balance switched from a trade deficit of EUR 2,068 million in 2008 to a trade surplus of EUR 1,857 million as a result of an increase in exports (from EUR 10,535 million to EUR 12,725 million) and a decrease in imports (from EUR 12,603 million to EUR 10,868 million).¹⁶⁵ The EU28 is the largest exporter of creative goods among developed regions with France, Italy, United Kingdom, Germany, Netherlands, Poland, Belgium among the top ten creative goods exporters. Eastern Europe is emerging as a creative hub for video games with top developers and digital animation professionals in Romania, Poland and Bulgaria, enhancing the technological competitiveness of the region.¹⁶⁶

164 UNCTAD (2018), Creative Economy Outlook: Trends in international trade in creative industries, UNCTAD/DITC/TED/2018/3, Geneva.

165 Eurostat (2016) op.cit.

166 UNCTAD (2018) op.cit.

On a national basis, the United States still dominate the developed regions group of top creative goods exporters but the world’s largest exporter and importer of creative goods and services is China^.167 The country has been dominating international trade in creative goods combining sustained growth over the past three decades, a shift towards global production and a pivotal role in sustaining the regional and global creative market. Its exports of creative goods have grown at twice the global average between 2002 and 2015. Asia as a whole is becoming a powerful creative region with China (including Hong Kong and Taiwan), India, Singapore, Thailand, Malaysia and Philippines in the top ten developing countries for creative economy, but its global performance is driven by China.¹⁶⁸

The demand for creative content is rising globally, especially for on-demand services. The VoD global market is expected to reach $94 billion by 2023 at a CAGR of 8.93% (in 2017 the market was valued at

$56.26 billion)¹⁶⁹, representing an opportunity for European CCS. Large markets such as China have already expressed an interest in European productions as demonstrated by the latest figures from film admissions. Admissions to European films outside Europe reached a peak at 97 million in 2017, compared to 82 million in 2016. This increase was driven by the Chinese market, and linked to the fact that five European blockbusters accounted for more than five million tickets.¹⁷⁰

Characterised by an important number of independent operators, the European CCS are threatened by international corporations taking over the EU market. The music industry for instance, is marked by the internationalisation of concert promoters such as Live Nation and AEG. These two American-based companies, world leaders of concert promotion, are expanding their market share by either buying prominent national festivals (e.g. Rock en Seine in France) or by internationalising festival brands (e.g.

Lollapalooza). This has a consequence in the increase of the headliners’ fee while artistic fees of emerging artists are decreasing.¹⁷¹ Recorded music for its part, is now more globalised than ever through widespread digital distribution. There is a parallel increase of music productions due to multiple production possibilities (e.g. home studios), and easier licensing possibilities (via online music distributors such as Tunecore or iMusicians). However, the remuneration logic of digital platforms leads to the concentration of revenues on the top-hits (see section 2.1). It is also more difficult for smaller artists to generate income as the amount of money garnered through subscription is pooled together and then paid to artists depending on their total streams and terms negotiated.¹⁷²

As shown in the case study presented below, in the publishing sector, Europeans are starting to develop new services to counter the influence of foreign systems such as the American e-reader kindle powered by Amazon.

167 Ibidem

168 Ibidem

169 Market Research (2018) Future Over the top Content Market Research Report Global Forecast, 2018.

170 European Audiovisual Observatory (2019) op.cit.

171 Olivier Richard, ‘Le concert à l’âge industriel’, Libération, 16 November 2018. Available online https://next.liberation.fr/musique/2018/11/16/le-concert-a-l-age-industriel_1692538

172 Victor Luckerson, ‘Is Spotify’s Model Wiping Out Music’s Middle Class?’ The Ringer, 16 January 2019. Available online

Table 6: Case study: Tolino e-Reading made in Germany Tolino e-Reading made in Germany

CCS sub-sector Publishing

Country DE Related issue

Global competition in digital e-books Specific trend

Providing an e-reading solution for the European book industry,.

Background

User penetration of e-books is expected to grow at a significant rate recording a CAGR of 3.3%

during the forecast period of 2018-2023.¹⁷³ Europe is the second highest market share in the global e-books market, with increasing prominence of e-books in the UK, Germany and France.

The global e-book market is highly fragmented with many independent authors and publishers.

Dominant players in the global e-book market are Amazon Kindle Direct Publishing (KDP), Apple's iBooks Author, and Smashwords Inc. To increase their domestic market shares, they adopt strategies such as joint-ventures and partnerships with small and regional publishers.

Description

The Tolino brand is backed by an alliance of leading German booksellers: Thalia, Weltbild, Hugendubel, Mayersche Buchhandlung and Osiander, as well as Libri with some 1,500 linked and independent bookstores across Germany, eBook.de and recently the Canadian Rakuten Kobo Inc.

as the technology and innovation partner (substituting Deutsche Telecom).

Aiming to prevent German e-book readers from using international competitor’s products and services (mostly Amazon’s KDP), Tolino developed its own series of e-readers and tablet devices, as well as a platform of linked and independent bookshops (Tolino cloud): Tolino has managed to offer a comprehensive digital reading platform across Germany. Internationally, Tolino has increased its prominence by Dutch and Italian bookstores in its group, expanding its offer.

In 2015, Tolino alliance introduced a platform, which apart from publishing houses and aggregators, includes a self-publishing platform (Tolino Media), enabling authors to market their portfolio through its sales partners and advertise accordingly.

Results and outlooks

There is no data available regarding Tolino market share globally in comparison to its competitors however, latest data from Germany show that Amazon is estimated to own roughly half of the e-book market, followed by the Tolino alliance of the two largest e-book chains, Thalia and Weltbild-Hugendubel at 34%, and Apple at 10%.

Tolino Alliance has managed to surpass the U.S Amazon Kindle only in 2014 with 45% market share. The initiative demonstrates a good attempt at providing a national product to

173 Mordor Intelligence (2019), E-Book Market - Growth, Trends, and Forecast (2019 - 2024)

https://www.mordorintelligence.com/industry-counterbalance the American offer, however it has not yet reached sufficient scale (even at European level).

References

https://mytolino.com/

https://www.kobo.com/news/change-in-technology-partner-at-the-tolino-alliance

https://www.wischenbart.com/upload/the_global_ebook_report_fall2013_final04-2edi_pdf.pdf In the context of increasing numbers of fluid cooperation models of peer groups and cultural networks, including beyond the European area,¹⁷⁴ ‘hypermobility’ becomes a social and economic condition in the CCS,¹⁷⁵ despite the fact that needs and opportunities differ across sectors, professional status and career stages. Due to increased competition generated by the emerging economies, cultural professionals need to develop financial and managerial skills in order to scout new professional opportunities abroad and unlock funding.¹⁷⁶

Nevertheless, CCS operators struggle to internationalise their operations, as obstacles limiting their mobility remain. These are financial obstacles linked to the costs of mobility (e.g. travel, residence, conference fees), regulatory obstacles due to the lack of harmonisation and adaptation to the needs of CCS, hurdles related to changing political climate which might affect funding and finally the fact that a cohesive approach to mobility at EU level is still in the making. ¹⁷⁷

Previously limited to or understood as artistic residences abroad, the mobility of CCS professionals is rapidly evolving to adapt to the social and economic context. A number of factors drive changing patterns in CCS international mobility.¹⁷⁸ Firstly, cross-disciplinary collaborations are increasing in creative partnerships involving various stakeholders from businesses, environmental organisations, schools, local governments which transform the nature of international collaborations. Furthermore, mobility and/or international operations can derive from domestic economic constraints linked to a fragmented labour market (see section 2.1) and atypical forms of work (see section 2.3) favouring mobility. International operations are also directly affected by rising nationalism and xenophobia, and the perception of migration as a security threat, which restricts movement of CCS professionals, and may be perceived as a threat to freedom of artistic expression. New technologies bring new formats of working with online communications, (live) streaming, virtual residencies, and at the same time require new professional skills that can be acquired or found in international collaborations. In addition, the environmental impact of international mobility (see section 2.7 below), as well as ethical and value-based considerations are ultimately transforming international operations in CCS. Such endeavours should consider the social and economic imbalances in which international networking takes place, as well as pay attention to diversity, openness and transparency in cultural exchanges.¹⁷⁹

174 Working Group of European Union Member States Experts (2012), Building a strong framework for artists’ mobility: Five key principles, Brussels

175 Bernava, S., Bertacchini, E., Artistic mobility, Views from European Cities and Artists, Turin 2016

176 KEA (2018), Study for the European CULT Committee, op.cit.

177 For a complete overview of mobility and challenges for CCS operators, refer to KEA 2018, Research for CULT Committee – Mobility of artists and culture professionals: towards a European policy framework, European Parliament, Policy Department for Structural and Cohesion Policies, Brussels

178 I-Portunus project (2019) Operational study Mobility Scheme for Artists and Culture Professionals in Creative Europe countries.

179 Dutch Culture (2018) Report on Fair International Cultural Cooperation.